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The appointment of a pre-determined arbitrator by Government significantly compromises the fairness of the compensation in Land Acquisition process and is in Violation of Article 14 of Constitution ?

@iVivekSudan

The National Highways Act and the Fair Compensation Act significantly impact the arbitration process for land acquisition, with several key developments:


Key Arbitration Characteristics


• Section 3G of the National Highways Act mandates arbitration for compensation disputes

• The Central Government typically appoints state government officers like Divisional Commissioners or District Magistrates as arbitrators

• Arbitration proceedings are considered quasi-judicial in nature

Constitutional Challenges
The Supreme Court is currently scrutinizing the arbitration process, with specific concerns:

• The mandatory arbitration may violate Article 14 of the Constitution

• The pre-determined arbitrator (usually a government employee) is perceived as potentially biased

• Land losers are currently deprived of alternative dispute resolution mechanisms

Compensation Determination

• Compensation is determined according to the First Schedule of the Right to Fair Compensation and Transparency in Land Acquisition Act, 2013

• If landowners disagree with the initial compensation, they can file objections before an arbitrator


The ongoing Supreme Court examination suggests potential reforms to make the land acquisition arbitration process more equitable and transparent.



The Fair Compensation Act significantly impacts the land acquisition arbitration process for highways through several key mechanisms:


Compensation Determination
The Act establishes that compensation for land acquisition is determined according to the First Schedule of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013.


Arbitration Procedure


• If landowners find the initial compensation unsatisfactory, they can file objections before an arbitrator

• The Central Government typically appoints state government officers (like Divisional Commissioners or District Magistrates) as arbitrators

• Arbitration proceedings are considered quasi-judicial in nature

Key Challenges
The Supreme Court is currently scrutinizing the arbitration process, specifically:

• Questioning the mandatory arbitration under Section 3G of the National Highways Act

• Challenging the potential bias of government-appointed arbitrators


Examining whether the current process violates Article 14 of the Constitution Compensation Calculation
The Act mandates that compensation should reflect the market value of the land, not just guideline values, ensuring fairer assessment for landowners.



The appointment of a pre-determined arbitrator significantly compromises the fairness of the compensation process through several critical issues:


Key Fairness Concerns :


• Unilateral arbitrator appointment by the government creates an inherent bias in the arbitration process

• The appointment violates principles of natural justice, specifically the Audi alterum partem (hearing both parties) and Nemo Judex in Causa Sua (rule against bias)

• Government-appointed arbitrators raise substantial concerns about impartiality, particularly in public-private contract scenarios.


Constitutional Implications
The Supreme Court has highlighted that such appointments:


• Potentially violate Article 14 of the Constitution

• Create an exclusionary process that undermines procedural equality

• Introduce a “real possibility of bias” fundamentally contrary to adjudicatory functions


Systemic Challenges :


• The Central Government’s power to appoint a sole arbitrator results in unequal bargaining power

• Pre-determined arbitrators, often government employees, cannot guarantee independent dispute resolution.


The current arbitration mechanism effectively undermines the principles of fair compensation and independent judicial review in land acquisition processes.

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